Chic, premium small cars are all the rage now. BMW kicked off proceedings with a reborn icon, and the MINI’s tremendous success spawned rivals such as the Audi A1, Alfa Romeo Mito and Citroen DS3. More recently, Opel joined the fray with the Adam, and even Lexus is considering a contender in this segment.

Now, according to Automotive News Europe, Volvo could be next to join the party, as the Swedish brand is said to be considering a rival to the MINI and A1. Should that happen, Volvo would need a partner to share the costs, as well as a smaller engine, which would probably be made in cooperation with parent company Geely, Volvo CEO Stefan Jacoby told the publication.

Jacoby explained that premium-car buyers are willing to spend extra even for subcompact-sized cars. “Premium customers no longer define luxury based on the size of the car or number of cylinders, there are other attributes which will come into play,” he said. The markets agree. European entry-premium segment expanded 19% to 332,262 units last year, according to market researchers JATO Dynamics.

No rush though, as the company will first focus on core segments. “My priority is to bring the Scalable Platform Architecture online and to renew Volvo’s core ranges, the 60, the 80/90 and the SUVs. When I have managed this, I will look to diversification, going into niches, doing sporty versions and also looking to smaller cars,” Jacoby added.

Currently, Volvo’s smallest car is the V40 that made its debut at Geneva in March. The five-door hatch, which you can learn more about here, is fighting for the same pie as market leading Germans Audi A3 and BMW 1-Series. Mercedes-Benz is also challenging with the impressive new A-Class.